Bovespa-Index Futures Drop as Brazil GDP Growth Misses Forecasts

Bovespa stock-index futures fell
after a report showed Brazil’s economy expanded in the fourth
quarter at a slower pace than forecast, adding to concern
faltering growth may sap corporate earnings.

Multiplus SA (MPLU3), the frequent-flier unit of Latam Airlines
Group SA’s Brazil business, may move after reporting fourth-
quarter profit that trailed forecasts. Insurer Sul America SA
may be active after saying it plans to buy back as much as 3
percent of the public float of its units in the next 12 months.

Bovespa-index futures tumbled 1 percent to 57,070 at 9:05
a.m. in Sao Paulo. The real weakened 0.3 percent to 1.9843 per
dollar. Brazil’s gross domestic product grew 0.6 percent in the
fourth quarter from the previous three-month period, the Rio de
Janeiro-based national statistics agency said today. Economists
surveyed by Bloomberg had forecast an expansion of 0.8 percent.

Eighteen of 28 companies on the Bovespa (IBOV) index that have
already reported fourth-quarter earnings missed analysts’
forecasts, according to data compiled by Bloomberg.

The Bovespa has dropped 9.3 percent from this year’s high
on Jan. 3 amid concern accelerating inflation may curb Brazil’s
economic recovery and the government’s interventionist policies
will hurt profits in industries including utilities and energy.
The MSCI BRIC Index (MXBRIC) of shares in Brazil, Russia, India and China
has slid 4.3 percent over the same period.

Brazil’s benchmark equity gauge trades at 11.7 times
analysts’ earnings estimates for the next four quarters,
compared with 10.5 for the MSCI Emerging Markets Index (MXEF) of 21
developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 8.72 billion
reais yesterday, which compares with a daily average of 7.53
billion reais this year through Feb. 26, according to data
compiled by the exchange.